Chris Murphy takes on student loans even as he pays off his own

U.S. Sen. Christopher Murphy, D-Conn., who serves on the Senate Foreign Relations Committee, briefs the media Nov. 26 prior to a meeting at the foreign ministry in Berlin. Murphy and Sen. Brian Schatz, D-Hawaii, are co-sponsoring a bill that aims to reduce the cost of going to college.

"Onus (should) be on colleges to lower costs, not students to cough up more cash," Murphy declared in a Twitter message last month, just days before he and Sen. Brian Schatz, D-Hawaii, unveiled legislation designed to stem the growth of this mountain of debt.

Their legislation, to be formally introduced this month, comes as Congress slowly considers reauthorizing the Higher Education Opportunity Act of 2008, the law governing federal higher education programs that expires at the end of this year.

Average loan debt for college graduates nationwide exceeded $29,000 in 2012, according to a report this month by The Institute for College Access and Success, a nonprofit research group in Oakland, Calif. The report, which takes into account data from graduates of public and private nonprofit four-year colleges, also shows that seven in 10 college seniors who graduated in 2012 had student loan debt.

Murphy and Schatz are hoping their proposal will prompt a discussion of new ideas to make post-secondary education more accessible and affordable. Their initiative comes as public colleges and universities in New England raised tuition and fees by 42 percent over the past decade, according to the College Board. For two-year colleges, the increase was 25 percent.

"I've heard from students and educators all across Connecticut and the message is clear: We need college administrators to wake up every day thinking about how they're going to bring down the cost of college for students," Murphy, a member of the Senate Health, Education, Labor and Pensions Committee, said in a statement. "Our legislation will incentivize schools to create new, innovative programs to bring down the cost of college while improving the quality of a degree, and will set new standards for schools that receive federal funding so that they're more accountable to students and the taxpayer."

Under his bill, colleges and universities would have two years to meet the new minimum standards that would be created with the help of a commission of students, education experts and stakeholders.

By Murphy's admission, the bill - The Affordable College Costs Empower Student Success Act of 2013 - is aimed at trying to ensure that future students will not be saddled with an unsustainable amount of debt, as opposed to tackling the current burden of debt.

Cap and gown and debt

But when it comes to the latter, Murphy has plenty of company in the Nutmeg State.

For the 2012-13 academic year, Connecticut residents who were undergraduates - about 20,000 students - borrowed more than $500 million in federal direct student loans, according to Constance Fraser of the state's Office of Higher Education. The state's graduate students - about 2,000 - borrowed approximately $195 million.

"Student loans matter in Connecticut more than other states because all the other costs families have to incur are bigger," Murphy said. "We today have a generation of young families that are absolutely drowning in college debt, and I'm frankly representative of that cohort paying for past college and desperately saving for future college."

The Institute for College Access also reported the percentage of graduating seniors with loans nationwide increased from 68 percent in 2008 to 71 percent in 2012. In Connecticut, 61 percent of the Class of 2012 graduated with student loan debt, on average roughly $28,000 each, the report said.

So far, hearings on reauthorizing the higher education legislation in the House and Senate have focused on simplifying the federal financial aid system, with a goal of making college costs more transparent and manageable for students and their families.

One focus of the hearings has been the Free Application for Federal Student Aid, the application form for all students seeking Pell Grants.

Today, about 9 million students receive Pell Grants across the country, in addition to the more than 10 million receiving federal loans.

The Pell Grant program is the main vehicle for helping low-income students afford college. Most Pell Grant recipients qualify for the maximum award, which is adjusted annually for inflation and stands at $5,645 for the 2013-14 academic year.

In that school year, the maximum grant would cover approximately 36 percent of the cost of attendance - tuition and fees, room and board, and allowances for books, supplies, transportation and other personal expenses - at a four-year public institution, down by half from 72 percent in the first full award year, 1976-77, of the Pell Grant program, when the maximum award was $1,400 and 1.94 million students were served.

In Connecticut, about 8,250 residents received Pell Grants in the 2011-12 academic year - the most recent figures available - totaling approximately $259 million. The maximum Pell Grant award that year was $5,550.

For the academic year 2012-13, state residents filed approximately 225,000 FAFSA forms. The 10-page application is not for a single federal aid program, but rather for consideration for several federal and state aid programs.

In a Senate HELP Committee last month on the higher education act reauthorization, committee members and panelists - including leading academic experts and higher education lobbyists - agreed the FAFSA form needs to be re-evaluated, as does the overall process for obtaining federal student aid.

Ideas for providing straightforward, low-to-moderate cost guidance and support services for high school students and their families also were discussed.

"As we tackle reauthorization, I look forward to discussing ways we can promote early, early, awareness of our financial aid programs so that students know what is available to them before they graduate from high school," Senate HELP Committee Chairman Tom Harkin, D-Iowa, said.

Repayment options

A recent House committee hearing focused on what happens after graduation, when students face uncertainty about repayment options.

The panelists - nonprofit organization directors, a lobbyist and a research professor - supported the idea of a mandatory income-based repayment plan. They, along with many House committee members, agreed that automatically placing student loan borrowers into the existing IBR program could make the debt more manageable and help students work toward full repayment.

"Those are all really good, smart reforms," Rep. Joseph Courtney, D-Conn., said in an interview. Courtney is a member of the Education and the Workforce Committee, which helped negotiate the last higher education act reauthorization - which took five years.

IBR was first made available in mid-2009 in an effort to link student loan repayment to income and family size. The U.S. Department of Education last month announced an initiative to inform student borrowers of repayment options such as IBR as a part of the Obama administration's effort to improve college affordability.

The Higher Education Act, first authorized in 1965, originally was aimed at aiding middle- and low-income students. While the act expires at the end of this year, funding programs established or extended under the Higher Education Opportunity Act of 2008 will run through Sept. 30, the end of the current fiscal year.

So far, the hearings in both the Democratic-controlled Senate and Republican-controlled House have lacked the partisan acrimony that courses through so many current congressional debates.

Sen. Lamar Alexander of Tennessee, the senior Republican on the Senate HELP Committee and a former president of the University of Tennessee, said during a recent hearing that he "intends to work closely" with Harkin in "a bipartisan way to get a result" before the current Congress adjourns in late 2014.

Declared Alexander: "There is no ideological monopoly on the idea of making federal student aid, whatever the amount is, a friendlier process. That's not a Democratic idea. It's not a Republican idea. I think we all would like to do it."